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All eyes on the Fed as investors fret about US regional banks

The Federal Reserve will announce its latest interest rate decision later today and investors will be hanging on their every word in light of recent banking sector instability. Today was always likely to mark the end of the US central bank's tightening cycle - not that it has explicitly signaled this - but we've now reached a stage in which every rate hike could have unwanted and unintended consequences. Turbulence in the banking system in March is evidence of that and the rescue of First Republ

03-05-2023 07:50 GMT by Craig Erlam

Oil takes a tumble, gold eyes Fed

Bank woes send oil prices tumbling once more Oil prices have been crushed again over the last 24 hours as US regional bank shares sold off heavily and fuelled fears of a more significant economic downturn this year. The warning signs are there that investors are extremely anxious about the global economic prospects, particularly the US, and the data is slowly catching up which should deter the Fed from hiking today but it in all likelihood won't. The US may be heading for recession and they may

03-05-2023 07:44 GMT by Craig Erlam

Australian dollar pares back gains, RBA's Lowe defends rate hike

RBA Governor Lowe defends rate hike Fed expected to hit rate trigger The Australian dollar is almost unchanged on Wednesday, with AUD/USD trading at 0.6658. RBA's Lowe says rate hike was needed The RBA decision to raise rates by 25 basis points caught the markets off guard, as expectations were high that the central bank would pause rates for a second straight month. The move has raised eyebrows, as just one month ago, the RBA took a pause, saying it needed to monitor the effects of 10 consec

03-05-2023 06:20 GMT by Kenneth Fisher

A risky lopsided US stock market performance

The year-to-date performance of the S&P 500 has been heavily skewed by the top 8 market cap stocks (FAANG + MNT). US regional bank fear persists despite the takeover of First Republic Bank by JPMorgan Chase. Markets are looking out for clues on the timing of the first Fed rate cut in today’s post-FOMC. The combined top 8 US stocks (in terms of market capitalization) in the S&P 500 under the FAANG + MNT group; (Meta/Facebook, Apple, Amazon, Netflix, Alphabet/Google, Microsoft, NVIDIA, Tesla) tha

03-05-2023 01:20 GMT by Kelvin Wong

Gold and Bitcoin surges on banking concerns, while oil stumbles

Low trading volumes and a deteriorating outlook send oil prices sharply lower Gold surges above $2000 level as banking concerns return Bitcoin still capped by $30,000 level Oil It got ugly a lot faster than any oil trader expected. Energy traders were turning constructive, even last week, the recent oil bear, Citi’s Ed Morse said ‘were close to a bottom in oil prices.’ Oil is in the danger zone as the banking crisis is crippling the short-term outlook for the economy and driving fears that we

02-05-2023 15:40 GMT by Edward Moya

Sell in May is here as banking weakness returns

Banking woes and debt ceiling drama weigh on risk appetite Treasury yields tumble as odds for a potential June hike completely disappear Fed starts two-day meeting, still expected to raise rates by 25bps tomorrow. Sell in May decided it didn’t need to wait for the Fed. Wall Street is quickly hitting the sell button as banking turmoil appears it is not going away anytime soon and was ready to focus on the next weakest link, potentially distressed lenders with tremendous exposure to commercial r

02-05-2023 14:26 GMT by Edward Moya

New Zealand Dollar higher ahead of employment data

New Zealand to release employment for Q4 NZD/USD hits 2-week high Fed expected to raise rates NZD/USD is considerably higher on Tuesday, trading at 0.6203, up 0.57%. Earlier, NZD/USD rose as high as 0.6218, its highest level since April 19th. New Zealand job numbers expected to remain strong New Zealand's labour market has remained robust, despite relentless tightening from the Reserve Bank of New Zealand, which has raised rates to 5.25%.

02-05-2023 10:00 GMT by Kenneth Fisher

Investors cautious ahead of the Fed and ECB later in the week

Investors appear to be treading carefully ahead of some key interest rate announcements this week, most notably the Fed on Wednesday but also the ECB one day later. Eurozone inflation data for April didn't throw up any nasty surprises a couple of days before the central bank makes its decision, rising slightly to 7% as expected, while core stayed stubbornly high at 5.6%. A 25 basis point rate hike is now heavily backed with one or two more to come over the following months.

02-05-2023 09:11 GMT by Craig Erlam

Oil prices stabilize, gold consolidates ahead of FOMC

Were fears of oil deficit premature? Oil prices appear to have stabilized in recent days, not far from the middle of the range they traded within from early December to March. The post-OPEC+ gains have now been wiped out which suggests traders are now of the belief that the economic outlook has deteriorated to the extent that the output cut won't create the deficit that was feared when some were calling for $100 oil.

02-05-2023 09:06 GMT by Craig Erlam

EUR/USD shrugs as Eurozone inflation steady

Eurozone inflation almost unchanged German retail sales fall by 2.5% Markets upwardly revise odds of Fed hike to 96% EUR/USD is trading quietly at 1.0966, down 0.09%. German retail sales fall by 2.5% The German consumer continues to hold tight to the purse strings, as March retail sales declined by 2.4%, compared to a consensus of 0.4% and -1.3% in February. This marked the fourth decline in five months.

02-05-2023 07:28 GMT by Kenneth Fisher

AUD/USD - Aussie soars after RBA shocks with 25-bp hike

RBA unexpectedly raises rates by 25 bp AUD/USD jumps 1% Federal Reserve widely expected to follow with 25 bp hike The Australian dollar has racked up sharp gains today. In the European session, AUD/USD is trading at 0.6691, up 0.93%. RBA surprises with 25 bp hike, Aussie surges The Reserve Bank of Australia has a knack for surprising the markets, and today's rate hike certainly qualified.

02-05-2023 06:07 GMT by Kenneth Fisher

RBA Update: An unexpected hike triggered a squeeze on AUD/USD

RBA surprised the market with a 25 basis points hike to bring the policy cash rate to 3.85% Emphasis on inflation targeting over concerns about the heightened risk of slower growth AUD/USD breached above the 50-day moving average, resurgence of short-term upside momentum. The Reserve Bank of Australia (RBA) has surprised market participants’ view of a second consecutive pause of its key policy cash rate with a hike of 25 basis points to bring it to 3.85%. Concerns about sticky inflation and ent

02-05-2023 02:19 GMT by Kelvin Wong

AUD/USD: Bulls capped by weak China manufacturing PMI & RBA

ASX 30-day interbank cash rate futures implied a further pause in the RBA cash rate through 2023. A contraction in China NBS Manufacturing PMI for Apr may reinforce RBA’s cautious stance. AUD/USD remains below the downward-sloping 50-day moving average. The Reserve Bank of Australia (RBA) will decide later today on its latest monetary policy decision where the market participants are expecting a second consecutive pause on the key policy cash interest rate at 3.60% after it hiked ten times from

02-05-2023 00:29 GMT by Kelvin Wong

Strong dollar weakens commodities, Cryptos lower as banking drama dies down

Poor PMI data from China drive crude demand concerns Gold struggles as yields surge; 10-year Treasury yield rises 14.4 basis points to 3.566% Bitcoin falls 3.8% to $28,200 Oil The ISM manufacturing report showed prices paid surged to the highest level since July as steel, copper, plastics, aluminum and diesel. The economy appears to be weakening at a slower pace and that should be good news for the crude demand outlook. Crude prices are paring losses on optimism the economy can strengthen now

01-05-2023 14:44 GMT by Edward Moya

Too Big to Fail gets Bigger, ISM reminds us to focus on inflation

Treasury yields surge as sentiment improves, Meta kicks off massive five-part bond sale ISM Manufacturing Report's Prices Paid surged to 53.2 v 49.0 estimate Stocks mixed over banking takeover and inflation reminders Wall Street is breathing a sigh of relief as the largest US lender, JPMorgan, will acquire First Republic Bank. It is starting to look like a few major banking issues will not end up leading to a banking crisis. In less than two months, the US has seen three of the top 30 banks

01-05-2023 11:53 GMT by Edward Moya

AUD/USD jumps, RBA likely to pause

Markets widely expect RBA to pause rates Fed expected to raise rates by 25 bp US ISM Mfg. PMI contracts but beats estimate The Australian dollar has started the week with gains.

01-05-2023 11:30 GMT by Kenneth Fisher

USD/JPY extends gains post-BoJ meeting

Bank of Japan meeting weighing on yen JP Morgan buys First Republic assets USD/JPY continues to rally and is trading at 136.84, up 0.40%. BoJ signals change is coming The Bank of Japan didn't change any policy settings at Friday's meeting, which was the first to be chaired by New Governor Kazuo Ueda. The yen took a tumble of 1.3% and the downward spiral has continued on Monday, with USD/JPY rising as high as 136.98.

01-05-2023 08:26 GMT by Kenneth Fisher

USD/CAD - Canadian dollar edges lower ahead of US, Canadian Mfg. PMIs

Canada's GDP rose 0.1% in March US, Canada to release Manufacturing PMIs After a 2 day mini-rally, the Canadian dollar is lower on Monday. In the European session, USD/CAD is trading at 1.3569, up 0.20%. Canada's GDP ekes out 0.1% gain Canada's GDP came in at a paltry 0.1% in February, missing the 0.2% estimate and weaker than the upwardly revised 0.6% in January, according to Statistics Canada.

01-05-2023 06:01 GMT by Kenneth Fisher

Brent Crude - Oil drifting lower once more after OPEC+ cut

Craig Erlam discusses the latest moves in oil in the aftermath of the OPEC+ output cut a few weeks ago.

28-04-2023 19:05 GMT by Craig Erlam

Week Ahead - Brace Yourself (Fed, ECB, NFP, Peak Earnings)

US This week will be extremely busy as we have an FOMC decision, the nonfarm payroll report, peak earnings season, all while Wall Street keeps an eye on the banking industry to see if any news stresses arise. The FOMC meeting is expected to have policymakers deliver one more quarter-point rate rise, possibly leaving the door open for one more. Disinflation trends need to show they are firmly entrenched for the Fed to take their foot off the tightening pedals.

28-04-2023 15:42 GMT by Edward Moya

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